President Donald Trump demanded the resignation of new Intel CEO Lip-Bu Tan on Thursday morning, citing alleged conflicts of interest — apparently related to Tan’s past investments in China.
“The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem,” the president wrote on his social media site. He did not elaborate on his concerns.
Intel’s shares fell about 2% in early trading Thursday, to $19.94. The company didn’t immediately comment on Trump’s demand.
Reuters reported in April that Tan had invested in hundreds of Chinese technology businesses. Reuters was unable to determine at the time whether Tan still held those investments and said it found no evidence his investments were illegal.
Earlier this week, U.S. Sen. Tom Cotton wrote to Intel’s board asking about Tan’s ties to Chinese firms and a $140 million settlement by the last company he led — Cadence Design Systems — over allegations that Cadence had sold chips to a Chinese military university.
The president’s demand adds to a litany of woes facing Intel.
The chipmaker is behind in advanced semiconductor manufacturing, is losing market share to rivals and has no advanced chips for artificial intelligence. Further, Intel has made little headway in its multiyear quest to open a chip foundry, making semiconductors for other chip firms.
Intel laid off about 15,000 workers across the company last month and will cut more jobs through attrition and business divestitures, reducing its workforce by about a fifth. The company has laid off at least 2,400 Oregon workers in recent weeks, on top of 3,000 local jobs eliminated last year.
With its factories struggling, Intel warned investors last month that it may abandon advanced manufacturing — the central part of its Oregon operations — if it cannot find manufacturing clients for a forthcoming generation of chip technology it calls 14A.
Intel is the only advanced semiconductor manufacturer based in the U.S. The president’s resignation demand adds to the pressure on Tan, who has struggled to communicate a vision for Intel since the company hired him in March. His severe job cuts and a return-to-office mandate have alienated many employees.
Though Trump frequently issues and then abandons maximalist positions, the president has a lot of leverage with Intel. The company has manufacturing facilities all over the world, which could be impacted by the president’s trade war. Trump said Wednesday that he would impose new tariffs on semiconductor imports, though he indicated he would exempt companies that also manufacture in the U.S. — a very broad loophole that appears to insulate Intel and many others from the tariffs’ impact.
Meanwhile, Intel is still waiting on $5.7 billion in CHIPS Act subsidies awarded by the Biden administration. The company said last month it has submitted claims for $850 million to the Trump administration, asserting it has fulfilled the terms to qualify for payments, but hasn’t received the money.
Should Trump persist in his demands for Tan’s exit, he could put Intel in a difficult spot.
“Unfortunately, unlike other tech CEOs Lip-Bu does not appear to have cultivated the kind of personal relationship with Trump that would help to assuage his ire,” Bernstein Research analyst Stacy Rasgon wrote Thursday in a note to clients.
After Intel’s board forced out former CEO Pat Gelsinger in December, the company spent months searching for a replacement before settling on Tan.
There are few obvious candidates to step in for Tan. Rasgon suggested Intel might try to bring back Gelsinger, promote Chief Financial Officer David Zinsner, or perhaps try to recruit Broadcom CEO Hock Tan.
“We aren’t really sure what would happen if Lip-Bu were to resign,” Rasgon said. “Clearly it will be hard to attract new leadership talent into a role like this (not to mention likely renewed difficulties attracting any talent at all that would help with the broader turnaround).”
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